Transform or disappear, the Darwinism of IT: In order to adapt to a digital world, a two-speed IT is needed.
Despite the importance of IT in today’s digital world, Chief Information Officers (CIOs) often struggle to get their voices heard by executive committees.
Faced with this challenge, IT departments are being forced to reinvent themselves to adapt their companies to the fast paced evolution of technology. The Boston Consulting Group has developed a business approach that allows IT to shed off its appearance of a heavy cost center and to adopt a new, more realistic persona as a quality service provider, partnering with users and the management.
Would you be a professional, a student in engineering, a student in a business schools or would you just be interested in digital transformation and its implications on IT, Learn with three BCG experts why and how to manage an IT department as a business in order to transform a company and adapt it to a digital world.
Join the conversation: #2SpeedIT

Vanessa Lyon

Eric Baudson

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[MUSIC] IT infrastructure covers everything that is used by the end user, the working environment with the computer, the phones, and so on, and the back office systems, such as the servers, the network, the storage. Too often, people tend to think that infrastructure doesn't really matter. It's a commodity, a bit technical, not so complicated. It's stuff for the technicians to test work. Actually, it's not that simple. First, infrastructure represents 50 to 60% of the cost of the total IT budget, which is not negligible. Second, it is the backbone of everything. If it doesn't work, nothing else works. Third, it inherits from all the complexity and the problems, from the rest of IT. If your system is not well-customized, if the level of service is not well defined, if the architecture principle are not respected, it will not work, or it will not work well. Very often I find that it's a good way to start a diagnosis of an IT department to look into the infrastructure. Am I taking into consideration the technical constraints? Do I have the right skillsets of the employees? Am I respecting the processes? Very often, all the people from infrastructure know very well what's going on all over the place. I said earlier that IT is a domain where you always have tensions. Of course, the first place where you have tensions is between IT and the business. I think we've covered that already. Now you have a second place where you have tension. It's between the application world and the infrastructure world. People from the application world, they always want new stuff, more agile, more scalable. They will come while changing requests. People from the infrastructure, they want things to be simple and stable and secured. And you will have attention there, you will have compromises to make. Because if the people from application take over, then you open the door to a very large variety. And this will impact in the long run the cost of infrastructure, but also the stability. If the people from infrastructure take over, then it might be not so creative in application landscape, and the users may be a bit bored. It's a big trick to find the fine line between these two worlds. The CIO should definitely look into infrastructure. His role is both to guarantee the reliability of operations on a daily basis. If there is an incident, if the data center is down, this has to be solved right away. This is top one on the list. But also, he has to work on infrastructure, to transform the basis of the whole IT to make sure it's more reliable, more cost efficient, state of the art in terms of technology. For that, you have to do a zoom of your strategic plan on the infrastructure scope. And this is a big challenge, because very often teams from infrastructure are very operational. They'll focus on the day to day, solving the incidents, putting a patch, setting up the system, monitoring this application. Well, working on the strategic plan, it's about reinventing yourself, looking ahead, changing the systems, thinking three to five years from now. It is not the same exercise. Yet, this is the only way to be able to transform and to improve the quality of your daily operations. For that, we recommend to formalize a specific infrastructure strategic plan with standable milestones, specific dates, so that the teams, they know where they are going. And they can manage their daily operation while they run the transformation. Now last thing about infrastructure, because you have to mention that topic in the infrastructure chapter. Outsourcing, should you outsource, not outsource, this depends, very often infrastructure is outsourced actually. This is always a challenging project to outsource an infrastructure. Three things to keep in mind, one, you have to rely on your strategy plan. Because it's a good way to set the targets, know where you are going, and share explicitly and transparently with the service provider what it is that you want to achieve. Second, this has to be a win-win situation. If you go for a contract where you squeeze too much the margins of your provider, then you will be in trouble because in the long run they will try to find ways to recover this margin slippage. And this may impact very sadly the quality of service. Three, this is a garbage in, garbage out game. If you try to outsource your problems, they will come back to you ten times bigger. So you have to work together with your service provider, to build your strategic plan, to define the who-does-what in that plan. What are the targets, where are we going, what should we do internally, what do we expect from the service provider externally? Eric will tell you much more about successful outsourcing in the later video.